How to save for retirement, no matter your income!

Even though retirement feels like ages away, it takes a while to save for it.

When you decide to put down your tools and pick up the golf clubs, there are a number of costs you will want to be able to afford. This is why we have superannuation funds, so we can save for a comfortable retirement throughout our working lives, rather than trying to do it all at once at the end.

Of course, this saving goal is a lot easier when you have a high income. But what if you don’t?

Here are some great money-saving tips to use no matter what income you have.

Draw up a budget

Planning and budgets are boring, but they could save you a lot of money in the long term.

Create a table on your computer, or draw one up in a book, and write down all of your expenses for a month or two. Make sure to include absolutely everything (including small purchases), and organise it in an easy-to-read format so you can check back later.

After you finish, you’ll clearly be able to see your outgoing expenses for the time period you chose. This will enable you to examine where you are overspending, underspending, or doing things right. For example, if you buy a coffee every day at $5, after two months you’ll be able to see that you spent $300 on coffees alone. That’s $1,800 per year!

It’s easy to say, “it’s only five dollars,” when you look at the day to day, but when your budget shows you the month to month, you’ll clearly see where your money is being overspent.

Cut back

Now that you know what your expenses are, you can start cutting back. It might hurt for a month or two (we all know how important coffee is in the morning), but $1,800 extra per year is nothing to shun.

There are more ways you can cut back than just denying yourself coffee, however.

For example, how far away do you live from work? Or where is the bus stop in relation to your house? There may be ways you can drive less per day, thus reducing fuel costs. For example, if you drive to the bus stop every morning, but it would only take 20 or so minutes to walk to, you could consider using your feet instead. Not only will this save fuel, but it could help you battle that waistline too!

You don’t always need to buy new clothes, furniture items and other goods brand new, either. Second hand shopping can actually be a fun experience, as sifting through the various charity stores and other similar outlets is like an adventure in itself, and there are always bargains to be had.

Plan ahead

Finally, once you have outlined the cutbacks you could make, you need to start planning ahead.

One of the places people often spend more than they need is at the supermarket. Going in without a list or set budget means you are much more likely to buy what you simply don’t need, racking up that shopping bill sometimes quite extensively. Rather than just winging it, try writing up a set shopping list, or going in with a limited budget. Most mobile phones have calculators on them, so you can easily keep track of how much the bill is likely to be.

If your housing costs are too high as well, it might be worth considering moving to a less expensive place, or finding a new tenant to cut some of the excess of the weekly rent.

Once you have these strategies in place, you’ll have more money leftover each pay cycle that could help you save for retirement. That means you’re going to need a superannuation fund that works for you, and can help grow your retirement pool.

Virgin Money Australia

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